Economy & Market
Infrastructure development has to happen
Ravindra Mate, CMO & President, ABG Cement
Under the flagship company of ABG Shipyard, the company is all set to set up a cement plant in India in a couple of places like Thumbadi, Gujarat and Madhya Pradesh. The company is in the process of setting up its most modern and eco-friendly 6 million tonne per annum cement plant and has Captive Limestone mines, Jetty and Desalination Plant. The capacities of all these units would be adequate to support the above 6 Million Tonnne Per Annum of Cement Production. Power will be supplied by ABG Energy Ltd located at nearby area. Very soon ABG Cement is expanding its manufacturing facilities to other parts of India as well as to other countries. The plants were about to come up in 2010 but got delayed.
The area in which Cement Plant is coming up has adequate quantities of Limestone which is the basic raw material for manufacturing cement. The advantage of this location is the coastal area which will reduce the road transportation and helps for export/import of the raw material and finished product.
ABG Cement is committed to utilise 100 per cent fly ash, produced by ABG Energy Ltd, for its cement manufacturing and all the cement and power plants are designed with energy efficient technology.
Whilst ABG Cement is taking its baby steps in the cement industry, Ravindra Mate, CMO & President, ABG Cement talks to ICR about his perspective on the industry.
When is your cement plant in Gujarat and Madhya Pradesh expected to be commissioned? And inspite of the bad time what made you invest in the cement industry?
The plant in Gujarat is expected to start in the first quarter of FY14 whereas plant in Madhya Pradesh is still under planning phase. Investing in cement business has to be a long term perspective and necessary to be done at the time when the downturn is there. If you really see our total installed capacity is around 322 MT and we have to go long way to support the expected infrastructure developments in this county. Today we have almost reached to the bottom of the economy and whatever changes will happen be only for the betterment.
How was the year 2012-13 for the cement industry?
The year is little better than the previous year with a marginal increase in all India growth. The prices were more or less stable with ups and downs depending upon the seasonal change in demand. However the prices will start looking up in the last quarter of financial year due to increase in demand. Especially in case of West Zone where we are placed, the CAGR growth is more than 10 per cent and is expected to continue.
How do you predict the year 2013-14?
2013-14 may see some growth YOY as lot of infrastructure projects will be under implementation looking in to the elections approaching in 2014. As also not many capacities are expected to materialise, cement capacity utilization may see some improvements. On the front of prices they may improve due to increase in the input cost (especially energy and logistics).
Now days it is becoming difficult to come-up with a greenfield projects due to environmental concerns and many other issues hence, more development will be on brownfield projects. The consolidation will also take place due to the above reason.
Cartelisation is said to be one of the reasons responsible for this industry suffering a set back. What is your take on it?
According to me the demand and supply equation only decides the production and price level.
What support in these circumstances would the industry require from the government?
Fundamentally the development needs to take place. The GDP growth is quite low now and expected only to improve. This country is desperately in need of infrastructure support (especially road, rail and ports) from government which should co-exist with the likely development taking place in future. Industry also expects the support on tax concessions and other sops to attract the investment so as to boost the installed capacity to commensurate with the development of the country.
It is said that the Pakistani Cement offered in the Indian market are of a better quality and are much cheaper as compared to us, Your views on the same?
We are producing the cement in India comparable to international standards. I believe the industry has taken up the matter with government on the duty levied on the imported cement.
How technologically advanced is India when it comes to international standards of technologically?
We have equally good technology standards at par with international standards.